EU Bans Anonymous Crypto Accounts, Privacy Tokens by 2027
2min read The European Union is set to implement comprehensive Anti-Money Laundering (AML) regulations that will prohibit privacy-preserving tokens and anonymous cryptocurrency accounts starting from 2027. This regulatory shift is part of a broader framework aimed at aligning the crypto industry with the stringent AML standards that govern traditional financial institutions.
Under the new Anti-Money Laundering Regulation (AMLR), credit institutions, financial institutions, and crypto-asset service providers (CASPs) will be prohibited from maintaining anonymous accounts or handling privacy-preserving cryptocurrencies. Article 79 of the AMLR explicitly establishes strict prohibitions on anonymous accounts, ensuring that all financial transactions are traceable and transparent.
The regulation extends to various financial instruments, including bank and payment accounts, passbooks, safe-deposit boxes, and "crypto-asset accounts allowing anonymisation of transactions" and "accounts using anonymity-enhancing coins." This comprehensive approach aims to eliminate any loopholes that could be exploited for illicit activities.
Vyara Savova, senior policy lead at the European Crypto Initiative (EUCI), noted that while the broader framework of the regulations is final, the implementation details are still being finalized through so-called implementing and delegated acts. These acts, mostly handled by the European Banking Authority, will provide the necessary guidelines for compliance.
Savova emphasized that centralized crypto projects, which fall under the Markets in Crypto-Assets (MiCA) regulation, need to consider these upcoming changes when determining their internal processes and policies. The EUCI is actively working on these level two acts by providing feedback to public consultations, ensuring that the implementation details are thoroughly addressed.
Under the new regulatory framework, casps operating in at least six member states will be under direct AML supervision. The Anti-Money Laundering Authority (AMLA) plans to select 40 entities, with at least one entity per member state, starting from July 1, 2027. The selection process will use "materiality thresholds" to ensure that only firms with substantial operations presence in multiple jurisdictions are considered for direct supervision.
These thresholds include a minimum of 20,000 customers residing in the host member state or a total transaction volume of over 50 million euros. Additionally, mandatory customer due diligence will be required for transactions above 1,000 euros, further enhancing transparency and accountability in the crypto industry.
This regulatory shift marks a significant change in the crypto landscape, as anonymity, once a hallmark of cryptocurrencies, is now facing unprecedented scrutiny. The EU's move to ban anonymous accounts and privacy coins signals a clampdown on unregulated spaces, aligning the crypto industry with the stringent AML standards of traditional finance.
For crypto firms, compliance with these new regulations is no longer a domestic concern but a pan-European imperative. The EUCI’s handbook offers critical lessons, highlighting the need for sophisticated compliance frameworks, robust oversight, and cross-border accountability. Firms must act swiftly to update their Know Your Customer (KYC) and Know Your Business (KYB) policies, develop internal controls to monitor self-hosted wallets and cross-border risks, and prepare for AMLA supervision.
The EU’s regulatory map is clear, but it raises critical questions. The ban on anonymous accounts and privacy coins could reshape business models, particularly for platforms prioritizing user privacy. Firms must balance privacy and compliance, potentially adopting privacy-preserving technologies like zero-knowledge proofs. Early compliance could become a competitive advantage, allowing firms to build trust, attract institutional clients, and position themselves as key players in a maturing market.
In conclusion, the EUCI’s AML Handbook marks a key moment for crypto compliance. Early adopters stand to gain a strategic edge, while those slow to act risk legal and operational setbacks. By embracing these 13 pillars, crypto firms can navigate Europe’s evolving regulatory landscape and excel in a more transparent, accountable crypto ecosystem. 
